Making everyone happy is impossible. Pissing them off is a piece of cake. I like cake.

Monday, September 14, 2009

Zero Base Policy

Your humble Devil has received the following missive from the Adam Smith Institute, advertising Dr Madsen Pirie's new book—Zero Base Policy.

The Adam Smith Institute gives the next government a "shopping list" of policies needed to rescue Britain. In a report "Zero Base Policy", released today, the Institute's President, Dr Madsen Pirie, says minor change to existing policies is no longer an option, given Britain's dire economic and social fabric. Instead the need is for "zero base" policies to provide new and effective ways of achieving policy objectives.

Topping the agenda is economic change. The ASI sets out measures to turn Britain from a high tax, high debt economy into one on the virtuous circle of low taxes and increasing growth and revenues. The ASI calls for rejection of the Treasury's 'static' model of the economy in favour of a 'dynamic' one which factors in the growth impact of lower taxes.

The ASI proposes to lift the low paid out of income tax by raising its starting threshold to £12,000 p.a., corresponding to the minimum wage, or about half the average wage. This eliminates the need for vast welfare transfers to low earners by letting them instead keep what they earn. At the top end the ASI proposes to expand the tax base by successively raising the threshold for the 40% rate until no-one pays it.

They propose overhauling local finance, replacing Council Tax by local sales taxes as in the USA, and setting business rates locally. A radical innovation is their call for local budgets to require popular vote approval before coming into effect.

Civil liberties are to be addressed by the ASI's call for a one-year judicial commission to review them and make recommendations. Meanwhile the ASI report calls for public body CCTV surveillance to be limited to police and security services, and for anti-terror powers to be restricted to cases of suspected terrorism.

Controversially, Dr Pirie describes government policy on drugs as a failure, and calls for a total rethink, under which most narcotics would be made available at medical centres, and the production and sale of recreational drugs legalized under controlled conditions.

The ASI sees the biggest opportunity for reform in education, and calls for parents to be permitted to use their child's education allowance at any school which is non-selective and requires no additional top-up fees.

Regulation is to be addressed by the use of 'sunset' clauses under which regulations expire unless specifically renewed, and for regulation to be implemented by case law, with the findings of tribunals and juries filling in the details of broad statutes.

The shopping list contains 33 radical objectives which it calls upon the next government to pursue, including the abolition of regional tiers of government and agencies, and the phasing out of most capital taxes. It closes with a call for the MPs representing English constituencies to be constituted in Westminster as the English Parliament, with powers similar to those enjoyed by the Scottish Assembly.

"The list," says Dr Pirie, "sets out the objectives which could turn Britain around. While they could not all be implemented within a single term, they should constitute the goals to be aimed at."

This all sounds very laudable. Madsen has, at least, grasped that we need a radical rethink of how this country operates—tinkering at the edges simply isn't good enough. As such, his ideas have about as much chance of happening as mine have.

Anyway, I haven't had the time to read the book—published by the ASI—in detail just yet, but a review will appear at The Kitchen sometime soon.

That looks interesting, but I would prefer a local VAT instead of a sales tax, as this incentivises councils to encourage manufacturing and business-to-business industries rather than just even more retail.

They should be calling for corporation tax cuts & ending of many building regulations. This is what has allowed Ireland, for the last 20 years, to achieve an average 7% growth rate. One would think, Ireland hardly being a far away country, is one of whose experience politicians would know a bit.

Zero base budgeting was popular a while back in industries under cost pressure. Every year, cost centres have to justify the benefits of their spend, ab initio. No “ well our budget last year was £xM, so …”

John B you may not have noticed that there has been a fairly widespread recession reaching not only Irleand but here to. Indeed since we are currently borrowing 12.5% of GNP to maintain the illusion of 4% recession Ireland is still, in real terms, doing better.

Also, of course, Ireland has gone from 2/3rds of our standard of living to 7/5ths. You may be glad we have a government which has been able to save us from the problems of wealth but I am not.

The only quibble is it doesn't go far enough. Why not allow vouchers to be used at selective, fee-paying schools? The re-introduction of rigorous school selection, coupled with competition across all school sectors, would probably be the saving of British education. Dropping public school fees by several thousand pounds a year would bring them within reach of more people. Those who currently send their children to public school are getting hit with a double-whammy: they are probably higher rate taxpayers (so contribute disproportionately), and they do not consume state education.

What will be the saving of education is public money, lots of it, properly spent. That means achieving a proper balance between the academic and the vocational, something the UK has never had (three pounds were spent on the grammar schools for every one spent on the secondary moderns; Correlli Barnett, 'The Verdict of Peace'), and a universal commitment to excellence to truth and excellence.

Now, that may have to involve having to let the right wing act out one of its union-smashing masturbation fantasies (got to throw them some kind of bone); the teachers have never got their heads round the idea that they're not medieval glovemakers, and don't really need guild privileges. However, what the education system does not need is fat, sleek businesspeople pontificating about how schools are not producing students capable of working in buiness. Such people have to learn, indeed one day may be compelled to learn, that the people are the landlords on whose terms business continues to be done; and that retaining the goodwill of the people by not insulting their children might just be good for business.